Federal Title now a trusted & verified SSI agent

Federal Title is now a trusted and verified title agent, having completed a standardized risk management process through risk management firm Secure Settlements Inc.

We successfully demonstrated to SSI that we meet federal regulatory requirements. Our implementation of the American Land Title Association's industry best practices was also helpful in attaining this new distinction. 

Mortgage industry risk management is a relatively new market niche, and SSI is the first company to offer title agents a standardized risk management process. Increased risk management in the mortgage industry is also a byproduct of the Dodd-Frank Act, passed in 2010, which mandated new consumer financial laws and created an agency known as the Consumer Financial Protection Bureau. 

Banks are under the CFPB microscope, and they in turn are taking a hard look at third-party service providers to ensure business practices and services are on the up-and-up in terms of the new requirements mandated by Dodd-Frank. Because of the potential for regulatory penalties and legal damages 

We choose to view the increased scrutiny of the CFPB, as well as regulations mandated by Dodd-Frank, as an opportunity to improve our business and further distinguish ourselves from other title companies in the region.

SSI's "Trusted and Verified" seal of approval is a visual queue to our clients that we're looking out for the best interest of all parties involved in the real estate transaction. 

Not all Power of Attorney documents created equal

The topic of "Power of Attorney" comes up pretty frequently in our office. On an almost daily occurrence, clients ask whether or not a Power of Attorney is sufficient for a client’s upcoming real estate settlement.  

Or, at the 11th hour we are informed someone who should be at settlement will not be attending settlement, and then come to find out their Power of Attorney is insufficient.  

Government mortgage entity Fannie Mae also issued new guidelines regarding the use of Powers of Attorney for purchase transactions earlier this year, so it seems like a good time to revisit the topic of Power of Attorney and discuss the differences between various types of Powers of Attorney.

What is a Power of Attorney?

A Power of Attorney is a written document which grants authority to an agent to act on behalf of a principal, in the event that the principal is unable to make decisions or act on his or her own behalf.  

There are several different kinds of Powers of Attorney, and it is important to understand the differences between them.

A General Power of Attorney is one that allows an agent to make all personal and business decisions on behalf of the principal.  It gives the broadest authorizations to the agent, and it is often used to allow the agent to make medical, legal, financial or business decisions for the principal.

In stark contrast, a Specific or Limited Power of Attorney is one that is narrowly drafted to give an agent power to conduct a specific transaction with specific powers.  For example, a principal could have a specific Power of Attorney drafted authorizing his agent to sell his property at 123 Main Street, Washington, DC, including the authority to sign all documents related to the sale, to include the HUD-1 Settlement Statement, Deed, etc.

In addition, a Durable Power of Attorney is one that remains in effect even if the principal becomes mentally incapacitated.  In order for any Power of Attorney to be accepted as a Durable Power of Attorney, specific language must be included in the body of the document (not just the caption of the document) stating that it shall "not be affected by subsequent disability or incapacity of the principal, or lapse of time."  If the specific language is not included in the document itself, the agent’s power to act on behalf of the principal will end if the principal becomes mentally incapacitated.

As each of the jurisdictions in the DC metro area have different requirements for drafting a real estate power of attorney, we strongly recommend that if you require the use of a power of attorney for an upcoming real estate transaction, you contact our office so that we can provide you with the required form for that particular jurisdiction.  

Or, if you already have a power of attorney, please forward a copy to our office for review, well in advance of settlement, to ensure that all the statutory requirements have been included for that jurisdiction.

Maryland rule threatens agents with $5,000 fine

Agents concerned about a rule in Maryland that threatens to fine them $5,000 for non-compliance can rest easy recommending Federal Title to their clients. We are fully licensed and all of our licenses are up-to-date.

Visit federaltitle.com/verify any time to verify our licenses for yourself. And please feel free to share the link at your discretion.

For your information, here is the gist of the new regulation that outline the responsibilities of agents who refer their clients to third-party services:

  • Make a referral in writing
  • Verify that the service provider has a current state license
  • Provide the date on which the agent last checked the state-licensing database
  • Provide an electronic link to the licensing record

All referrals provided in connection with “the provision of real estate brokerage services” are affected by the regulation, according to the Washington Post.

"This regulation’s broad scope includes, but is not limited to, referrals to mortgage lenders, mortgage brokers, real estate appraisers, home inspectors, home improvement contractors, plumbers, electricians, heating, ventilation and air-conditioning contractors, and all others who are required to be licensed," according to the Post.

As always, we're looking out for the best interest of our real estate agents and their clients. If you have questions about Federal Title's licenses, please let us know.

Did you know? Tenant Opportunity to Purchase Act in Takoma Park, Maryland

If you have been involved in real estate in the DC metro area you have likely come across the DC Tenant Opportunity to Purchase Act. But did you know that Takoma Park, Maryland also has a Tenant Opportunity to Purchase Act ("TOPA")?

The intent of TOPA is to promote the conversion of rentals to owner-occupied housing. Not complying with TOPA does leave the possibility that a court of competent jurisdiction may declare the transfer of the property void.  

As with DC, there are exceptions to the tenant opportunity to purchase. Some transfers that are exempt include transfers to a family member, transfers under a court order, transfers to the State or a local government and transfers of a minority title interest.  For a complete list of exempt transfers, please visit Section 6.32.020 of the City of Takoma Park Municipal Code.   

As the title company, Federal Title will require proof that the seller delivered a written offer of sale at the same price and terms as the third party contract of sale to each tenant, any registered  tenant association, and the City of Takoma Park by first class mail or personal delivery and, except for single family homes, that the offer was posted in a common area.  

For single family homes, the tenant has seven days from the date of receipt of the written offer of sale to provide a written statement of interest, and the City of Takoma Park has 14 days. For properties with two to six units, a group of tenants acting jointly have 14 days, then seven additional days for any individual tenant, then seven more days for the City.  

For properties with seven or more units, a registered tenant association representing at least one-third of the occupied rental units in the rental facility and the City of Takoma Park each have 45 days. (Please note that properties involving four or more units in Takoma Park will also need to comply with Montgomery County’s Right of First Refusal laws).

Similar to DC’s TOPA laws, a tenant does have the right to waive the rights but only if supported by consideration. Also, the closing must take place within 6 months of the offer of sale being mailed or personally delivered. Federal Title will additionally require that both the purchaser and the seller sign a TOPA affidavit. 

This is just a summary of the City of Takoma Park TOPA laws, but the full text can be found at Chapter 6.32 Tenant Opportunity to Purchase.

Close It!™ House of the Week: Large deck with spectacular views

This week we're checking out a contemporary, fully renovated detached single family home in the Fairway Hills neighborhood of Bethesda, Maryland. This living room of this home looks out on to a fantastic deck and spectacular views of Virginia. 

Large windows and skylights let in lots of sunshine. This house also has a custom kitchen with stainless steel appliances. It's four bedrooms and 3 bathrooms in all plus a family room, laundry room and separate exercise room. It's listed at $855,000.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $194,712.59. The monthly payments would then be around $4,087.31 per month. For a complete picture of the cash to close, or for a run-down of the seller's side of the deal, plug the numbers into the Web version of Close It™ or download the free iOS app

  • Ways to save at closing

    Title charges are the largest chunk of closing costs and can vary by hundreds of dollars.

    Learn more

  • What are closing costs?

    The real estate closing process involves loan steps, legal steps and title steps.

    Learn more

  • What's title insurance?

    Insure your legal ownership just like you'd insure the building, but for lots cheaper.

    Learn more

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Our blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. Rate tables and figures that appear on our blog are deemed reliable but not guaranteed. For current rates & policies, refer to our Quick Quote and Consumer Guide. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on our blog.